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Singapore Stock Exchange Taps Blockchain for Faster Settlement

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Singapore’s stock exchange is working with the Monetary Authority of Singapore (MAS), the city-state’s de facto central bank, to utilize blockchain in a bid to improve the efficiency of securities settlement.

The Singapore Exchange (SGX) said in a release on Friday that the collaboration is aimed to scale up the country’s Delivery versus Payment (DvP) capacity so that it’s able to automate transactions via blockchain-based smart contracts. DvP is a settlement process that ensures assets are transacted only when corresponding payments are received.

Lending technological supports are Nasdaq, professional service firm Deloitte and blockchain startup Anquan, according to the announcement.

The goal is to develop a distributed network where financial institutions and investors can transact securities that have been converted into digital tokens through different blockchain platforms.

The partners said the technology will be engineered based on the open source code resulted from the latest development of Project Ubin, which the MAS initialed in 2016 settle domestic interbank transactions via distributed ledger technology.

A detailed report to identify and examine key design considerations on how to ensure resilience and investors protection will be released by November, according to the release.

Tinku Gupta, the project chair and SGX’s head of technology, commented in the announcement:

“This initiative will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process.”

The SGX is not the only securities trading platform that is turning to blockchain for potentially faster securities settlement with lower risks.

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Currently, the Australia Securities Exchange is also charting to replacing its existing settlement system with a distributed ledger technology alternative, which is expected to roll out in 2020.

SGX image via Shutterstock


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